Upcoming Changes to Superannuation – Everything you need to know

 

 
Things to be Aware of as You Approach Payroll End of Year.

The Superannuation Guarantee Charge will increase again next financial year to 9.5% on the 1st July 2014; this rate will freeze until June 2018. The rate is proposed to gradually increase over the next years to 12%, subject to legislative process. At this stage it is scheduled to reach 12% in July 2022.

The proposed schedule:

Period Super Guarantee Charge %
1 July 2003 – 30 June 2013 9%
1 July 2013 – 30 June 2014 9.25%
1 July 2014 – 30 June 2015 9.5%
1 July 2015 – 30 June 2016 9.5%
1 July 2016 – 30 June 2017 9.5%
1 July 2017 – 30 June 2018 9.5%
1 July 2018 – 30 June 2019 10%
1 July 2019 – 30 June 2020 10.5%
1 July 2020 – 30 June 2021 11%
1 July 2021 – 30 June 2022 11.5%
1 July 2022 – 30 June 2023 onwards 12%

The new 9.5% rate is applied to Ordinary Times Earnings amounts paid after 30 June 2014, irrespective of when those amounts accrued.

The 9% rate applies to OTE/salary paid up to 30 June 2013.The 9.25% rate applies to OTE/salary paid up to 30 June 2014.The new 9.5% rate will apply to OTE/salary amounts paid from 1 July 2014 onwards (2014-15 year).

Practical Examples

  1. If on the 2nd July 2014 a payment of wages (OTE) is being made for the previous month, which rate applies? Is it 9.25% as it was for the quarter before the change or does 9.5% apply as it was paid after the date of change?

Answer: On 2 July 2014 the wages are paid to an employee for June 2014. The SG contribution is to be calculated at the 9.5% rate.

If the WAGE was PAID in June and then on 2 July 2014 the SG contributions are paid to the superannuation fund, the SG contribution is to be calculated at the rate when wages were paid, being the 9.25% rate.

  1. Alternatively if the payment was on the 2nd July for the week so that 5 days was pre 30 June and 2 days after 30 June is the rate different ie 9.25% for the 5 days pre 30 June and 9.5% for the 2 days after?

Answer:On 2 July OTE is paid to an employee that relates partly to unpaid wages accrued up to 30 June and partly to work performed after 30 June. The SG contribution is to be calculated at the new rate of 9.5% on the full amount of OTE which is paid on 2 July.

For details, checklists and guides on everything Superannuation Guarantee click here –www.icb.org.au/Resources/Payroll/Superannuation-Guarantee

Source: ICB May 2014 Newsletter